CMS Chief Defends Medicaid Rules But Is Willing To Talk

By Fawn Johnson

Centers for Medicare and Medicaid Services Acting Administrator Kerry Weems went on the offensive Thursday in explaining why the administration will not back down on seven Medicaid regulations lawmakers want to halt for one year.

“If you really are serious about good fiscal policy, you’ve got to draw the line somewhere. These regulations draw that line,” Weems said after speaking to state elected officials at the National Conference of State Legislators.

Weems said CMS officials are meeting with Senate offices to urge them not to support a one-year moratorium that passed the House Wednesday, 349-62.

Weems and GOP aides say the moratorium will not pass so easily in the Senate. It is unclear when the Senate will consider the bill. Weems said, “I suspect there is going to be significant debate when they do.”

One Senate GOP aide predicted the bill would not have enough support to override a veto.

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Weems was asked if the administration sees wiggle room on changing the rules or allowing a moratorium to go into effect for only select regulations. “We’re always willing to talk, and if that looked like a fruitful route, we might be willing to do that,” he said.

Weems backtracked when pressed about which regulations CMS might be willing to negotiate. “We’ll talk about any of them. We’re always willing to talk,” he said. “Perhaps we’re more persuasive.”

Sen. Olympia Snowe, R-Maine, who supports the moratorium, said the strong House vote will make it difficult for some senators to vote against it. “It is going to have major consequences for so many groups, special [education], disabled children, seniors. I mean, you go on, people who are just in desperate circumstances,” she said. “It would be interesting what the dynamics would be over here.”

The rules rein in a number of state Medicaid practices that the HHS Office of Inspector General and GAO have said are inappropriate, such as school busing of low-income children or transferring money to health providers they will later give back to the state in the form of rebates.

States say the rules would cripple their ability to provide care to Medicaid-eligible beneficiaries.

On Capitol Hill, lawmakers are listening to the states. Energy and Commerce ranking member Joe Barton supported the moratorium after negotiating a scaled down version of a bill originally introduced by Energy and Commerce Chairman John Dingell.

Last week, Barton said he agreed with the administration in principle, but he could not defend the regulations because Republican committee members were under too much pressure to stop them from going into effect.

Weems attributed the strong House vote to Barton’s support. “The fact that the ranking member of the committee was willing to vote for the moratorium, I think turned it into sort of a free and easy vote in the House,” he said.

Speaking of Barton, Weems said: “I think he thought that if he paid for it, then that would be sufficient. These regulations are about policy, and they’re not about the money, and that’s why you’re going to find us quite insistent on this.”

Energy and Commerce Health Subcommittee ranking member Nathan Deal, R-Ga., said Wednesday he is sympathetic to hospitals’ concerns that they could lose funding tied to low-income care if the rebate system is revoked. “I think a moratorium would be preferable. It does impact institutions like hospitals that say they have not had time to adjust to it.”

Deal voted against the bill on the House floor — protesting leaders’ decision to bring it up on the suspension calendar. He voted for the bill in committee.

Weems told state legislators that the regulations are needed to protect the state-federal partnership that is the backbone of Medicaid.

“You can’t talk about federal funding in isolation of the states’ roles or vice versa when we’re talking about Medicaid,” he said. “In practice, the loopholes of Medicaid threaten our partnership. Allowing Medicaid dollars to be spent on purposes other than health care and allowing real federal dollars to be matched with dollars that aren’t real threaten that partnership.”